Hundreds of thousands of young people descending on Madrid this week for the Catholic church's World Youth Day – which features processions, group prayers and a mass with Pope Benedict XVI – are to get a "special" concession.

Church leaders have ordered that anyone confessing, during this event, to having had an abortion – a sin punishable by excommunication – will be welcomed back into the church.

"Normally, only certain priests have the power to lift such an excommunication, but the local diocese has decided to give all the priests taking confession at the event this power," said the pope's spokesman, Father Federico Lombardi.

Two hundred white wooden confession booths have been set up in Madrid's Buen Retiro park for the event, which started on Tuesday and runs until Sunday.

At a time when church attendances in Europe are dipping Lombardi denied the deal on abortion had been dreamed up to attract waverers back to the church. "With so many young people attending there may be those who have had problems of this kind and it makes sense to reach out to them."

The driving force behind the deal is the archbishop of Madrid, Antonio María Rouco Varela, who persuaded the Vatican to offer women who had had abortions access to "the fruits of divine grace that will open the doors to a new life".

After his popemobile ride through Madrid on Thursday, the pontiff will sit in one of the booths Saturday morning to hear confessions from three visitors, before holding a mass for up to 6,000 seminarians.

The pope's visit throws into relief the divisions between old Catholic and new liberal Spain. About 140 organisations, including Indignados (a mainly youth protest movement against Spain's government), dissident priests, secular groups and gay rights groups, are expected to demonstrate in their tens of thousands against the papal visit, on both political and economic grounds, as the country experiences an austerity drive.

In offering to lift the threat of excommunication for women who have had abortions, the Vatican is treading sensitive ground. Abortion is a delicate issue in Spain, but with 112,000 legal abortions performed in 2009, it is clearly a choice many Spanish women are prepared to make. A new law came into force last year giving the right to abortion up to 14 weeks' term.

Another issue the pope is expected to speak out against is same-sex marriage, which became legal in Spain in 2005. However, on this issue as well, public opinion is more liberal than the rest of Europe, with 5.7 in 10 in favour, compared with an EU average of 4.2.

On the other hand, about 1.5 million pilgrims will descend on the Madrid during the World Youth Day celebrations.

Pope Benedict last took confession from the public at an event for young people held at St Peter's in Rome in 2008.

Young Catholics making the trip to the Spanish capital will also gain a plenary indulgence – effectively a reduction in the time believers spend in purgatory after confessing and being absolved of their sins. These concessions were once sold by priests, but now the indulgences are granted on special occasions.

Lombardi said he was not concerned at reports of protests over the estimated €60m (£52m) cost of the papal visit. "It is normal that people with objections should demonstrate. As long as they don't impede an event which will give great joy to a larger number of young people."